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I don't know how often seller's actually make concessions to pay for buyer-incurred costs in a RE transaction, but...Doesn't this really point to REAs engaging to represent buyers who are not really ready to buy (i.e., not enough money saved to cover their own expenses)? I'm not talking about concessions due to inspection items, etc.
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First, for those "not keeping score"...#1 - No. Just because a potential buyer is asking for seller assist, that does not mean the buyer is not prepared to take on their own costs.#2 - In some cases, it may. But, the question then becomes "Whose job is it to add speed bumps to their buying process?"#3 - Since REAs are salespeople, their job is to help the client to figure out a way to "make it work".In response to selected comments from other posts on this thread..."But, let's go in another direction. How about we establish a Federal Home Buyers Qualification Standard that sets a minimum financial asset level threshold that buyers need to meet in order to buy a home? Would you be in favor of that?"Personally, I believe that pretty much any bureaucracy will, sooner or later, screw up just about anything they attempt to manage. By nature, legislation has unintended consequences, and often ends up creating loopholes in the process...which then requires more legislation, etc., etc. So, while I do believe that there need to be laws against the most aggregious behaviors, I actually believe that consumers should be free to make their own decisions. Just, please, don't expect others to bail you out."So these may be the types of buyers you may be referring to, but again, just because the seller is offering closing cost assistance, doesn't mean the buyer isn't qualified or that the REA is pushing the buyer into something that they shouldn't be doing."I was unclear. I was not implying that there is any relationship between a seller offering closing cost assistance and the ability of the potential buyers. I was asking if there is a relationship between potential buyers who ask for seller assistance and their actual preparedness to buy. As others have pointed out, the request does not necessarily have any relationship to the buyer's preparedness."The thumbs up count is leaning my side's way, hard. I hate to burst anyone's echo bubble, but nobody cares if REA's help people get the most of their financing opportunities. The most telling part of the thread is that the only actual consumer type, that posted, got three thumbs for telling the penny police to stuff it."Hmmm...It surely wasn't my intent to create an us-v-them environment. Truth-be-told, I see the situation as more of a "we have met the enemy, and we are them" situation."The people who care, Hamp, are the hobbyists that lose a little part of their soul when a real estate agent earns a commission."Actually, on these forums, the truth is that hardly anyone really cares (given that most simply do one-and-done drive-by's on their questions). Personally, I find the topic interesting, and of more-than-passing-interest considering the amount of money that I have paid in commissions and some of my less-than-encouraging personal experiences.On a somewhat related "have you noticed?" tangent...While it is true that there is a small core of persons posting on these forums from the "non-pro" perspective, it's also true that there's also a fairly small contingent of RE pros who seem to be offended/irritated/concerned enough by our perspectives to take time out of their day to harangue at the RE wanna-bes in the peanut gallery. And, so, the circle gets ever smaller."Of course, and amazingly, it's only "they" who need to do things a certain way; "we," of course, are capable of making our own choices in life. I still don't understand real estate site commenting as a hobby!"On the off chance that you would like to understand...Initially, I just wanted to get information on mortgages. Not so much interested on the buy/sell "help me" posts. But, I started to notice that very few people would say "you're not ready, you should wait", or anything else that implied that "now" was not "the best time to buy". An over-generalization, but hopefully you'll let this one slide.Any-hoo...just thought that there was no reason why a consumer's voice should not be added into the mix. So..."hobby" it is."In real estate, who gets to say, and under what conditions, "I know you can get a loan, but I can't in good conscience allow you to buy this house?""In real estate, or in any other situation where an individual should bear the responsibility for their own decisions, no one should be able to prevent an individual from the inherent right to make their own decision, for good or bad. I have several times told clients in my line of business "Personally, I believe you are making a small/significant/huge mistake. But, if after listening to my concerns you are still intent on pursuing this line of action, I will help you to the best of my ability".
"I have put forth that the source of the crisis was mispricing risk, Jarrid countered by putting the finger on the CRA that required half of all loans to be given to lower-income, higher risk borrowers. You put forth that the CRA played a significant role, which isn't quite the same as, half."Half would be eye-opening to me, and it would surely affect my opinion if it were true."Excerpts from the links I posted before, which themselves have footnotes and links to other sources. Bolded italics in the following are my edits...From the Cato Journal...Initially, the regulations required that at least 30 percent of the mortgages that the GSEs would buy had to be affordable housing loans, but over time this requirement was ratcheted up so that by 2007 the requirement was that 55 percent of all mortgages purchased by the GSEs had to be "affordable," with a sublimit of 25 percent that were required to be mortgages made to low or very low income homebuyers. In order to meet these goals, Fannie and Freddie were expected to "lead the industry in making mortgage credit available to low and very low income families." Over time, pressure from ever increasing affordable housing goals forced a profound weakening of the GSEs' credit culture.
So, by the middle of 2008, there were almost 27 million subprime and Alt-A loans in the U.S. financial system. This amounted to almost 50 percent of all mortgages. More than two-thirds of these mortgages were held or guaranteed by government agencies like FHA (about 4.8 million), and the GSEs Fannie and Freddie (12 million loans), and by U.S. banks (a residual of about 2.2 million) that were required to make them under the CRA. This is a vitally important fact, because it shows that the underlying cause of the large number of subprime and Alt-A mortgages in our economy was not the lack of regulation at the origination level but the government's own demand for these loans.
Accordingly, a strong argument can be made that the financial crisis was not caused by unregulated mortgage brokers, or by the rating agencies, the Wall Street investment banks, or the commercial banks that eventually had to be rescued with taxpayer funds. The responsible parties were those who made and sustained government policies that distorted the housing finance market—resulting in the creation of an unprecedented number of high-risk mortgages. Fault also rests with the management of Fannie Mae and Freddie Mac, who failed to disclose that they were complying with government requirements by acquiring and securitizing vast numbers of high-risk mortgages.From the Pinto analysis...In 1992 the interests of Fannie, community groups, and Congress converged resulting in the passage of GSE Act. Fannie got its wish as the GSE Act formalized its strategy of using affordable housing to protect its key charter privileges – protection that would last until 2008, two months before it and Freddie would be forced into conservatorship. The community groups got their wish now that Fannie and Freddie were required to loosen underwriting standards in support of CRA. Congress got its wish by moving the affordable housing mission largely off-budget and at the same time, placing itself in a position to take credit for the affordable housing activities of Fannie and Freddie.
Compared to the United States, Western Europe‘s housing finance systems were neither uniform nor standardized. The absence of the equivalent of a Fannie, Freddie, or HUD throughout Western Europe goes a long way towards explaining how it avoided the worst effects of the housing decline while the U.S. did not. It is relevant that the U.S. ended up with almost half of all outstanding loans being NTMs, loans with weak loan characteristics.
When the financial crisis hit in full force in 2008, approximately 26.7 million or 49% of the nation‘s 55 million outstanding single-family first mortgage loans had high risk characteristics, making them far more likely to default. Each of these high risk characteristics represented a weakening of one or more of the traditional "Three Cs of Mortgage Credit".
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